Series of properties sold in region as part of £53.7m deal
A property investment firm has announced it has bought a series of properties across the North West as part of £53.7m deal.
Industrial property investor Hansteen has exchanged contracts with St Modwen to acquire a mixed-use portfolio of 34 properties.
The properties are located throughout the UK with a focus on the North West and the West Midlands.
The deal reflects a net initial yield after costs of 9.15% and a low capital value of £41 per sq ft.
The purchase will be funded with current cash resources and a drawdown under the revolving credit facility from the Royal Bank of Scotland.
The portfolio provides 1.4 million sq ft of accommodation, let to more than 200 tenants producing a current rent of £5.25 million per annum.
Approximately 85,000 sq ft, 6.1%, is vacant and the weighted average unexpired lease term is 3.10 years to expiry and 2.75 years including break options.
The tenant base includes Toolstation, Pirelli UK Tyres, Staffordshire County Council and British Steel.
Morgan Jones and Ian Watson, joint chief executives of Hansteen, said: “This portfolio fits perfectly with our buying criteria.
“There are a number of asset management opportunities and initiatives across the portfolio which provide us with the opportunity to increase the rent roll and create additional value.”
Rupert Wood, property director at St Modwen, said: “This disposal is in line with St. Modwen’s strategic objective to refocus our portfolio on fewer, larger assets with a target to sell £150-175m of retail and small assets during 2018.
“We have now exchanged contracts to sell £144m of these assets so far this year and, combined with previous disposals, we have now sold £76m of the c. £100m of small assets earmarked for sale when we announced our new strategy just over a year ago.
“As planned, we intend to reinvest the disposal proceeds into our industrial/logistics pipeline which, with a yield on incremental capex of c. 9% and limited operating costs, is expected to deliver a marked pick-up in net rental income over the long term.”
Hansteen Holdings PLC (LSE:HSTN) is an industrial property REIT that invests in properties, across the UK, with high yields, low capital costs and opportunity for value improvement.
Founded by Morgan Jones and Ian Watson, the company listed on AIM in November 2005 raising £125m.
Hansteen has total property under management of some 325 assets with a value of £818.1m.
Properties in the region bought as part of the deal include Evolution Park in Haslingden Road, Blackburn, the Old Mill Industrial Estate in Preston, Lankro Way in Eccles, Edge Lane in Manchester and Brasenose Road in Liverpool.
